The nation’s economic recovery is anemic, with unemployment rates continuing to climb, but this doesn’t mean that your household economy is in trouble. In all the news that I've read about the economy, the media fails to report that around 90% of the country that wants a job has one; small businesses are hiring; and that if you buy stock now, when the market goes back up, you’ll be in an enviable position. Recession, even economic depression, is also a mindset. And there are millions of people in the US and around the world who are simply choosing not to participate in this downtrend.

Why do recessions cause anxiety? Because of our fear of uncertainty and the unknown. And then there is the media, which can provoke that anxiety. Local news reports have started running stories about people who have a complete year’s supply of food on hand at all times for the coming depression. Employment security (or the lack thereof), investment certainty (or the lack thereof), inflation, and other factors all combine to create a sense of dread that the media elevates to panic. But you don’t have to participate in the fear, the hype, the sleepless nights, or the hoarding. Here are a few simple (or not so simple, but effective) ways to prepare for any economic slowdown. These methods will help you to avoid participating in the recession and the fear mongering that prevail during such periods. (See also: How to Control Anxiety and Start Enjoying More)

Emergency Funds Are a MUST

The best way to combat uncertainty is to have a back-up plan. Back-up plans remove fear. If you had money to cover six months worth of household expenses (food, bills, house and car payments, etc.) in a high interest savings account — or even under your mattress — “just in case”, would that ease your mind about getting a pink slip? Would you work differently knowing that you had a Plan B? Increasing your savings — your “rainy day fund” — will ease your mind and give your family a strong financial footing. You may even be able to tell your boss “thank you” when the pink slip comes because then you'd be free to start your own small business or spend time at home with the kids or plant that garden you were meaning to, or do whatever it is you would like to do while you look for another job.

Pay off Debt

What would you do with an extra $1,000 dollars a month? Would you revisit your stock broker for advice on how to build your retirement? Or perhaps you'd like to rethink the early mortgage payoff and pay off your house. Or what about building up your emergency fund or taking a vacation? Would you stimulate the local economy by being a consumer? There's a lot that you can certainly do when you have an extra $1000 or more a month in income. Most American households pay anywhere from $800 to $2,000 a month toward debt (including car loans) and compound interest. But imagine having no debt to worry about — then even if you lose your job because of a layoff or pay cut, things wouldn't be so dire given that you don't have to make debt payments. If you're having trouble paying off debt, you may want to consider credit counseling or debt settlement as a last resort.

Keep Cash on Hand

If you are worried about a run on the banks, or your bank in particular, then keep a supply of cash on hand: just enough to buy food, water, and gas for a couple of weeks, no more. Should your bank fail, your deposits and surely, your high yield savings are insured though the FDIC for up to $250,000 and you will get your money back, eventually. Should the FDIC fail…well, getting money out of your bank will be the least of your problems if the Federal Reserve fails.

Don't Stop Investing

Warren Buffett (a close, personal friend of President Obama, if one believes campaign rhetoric), once said about investing: “Be fearful when others are greedy and greedy when others are fearful.” Well, right now should be the perfect time to invest because everyone and their brother is taking money out of the market and hiding it in a paper grocery bag in the back corner of the hall closet.

Sure, you may lose a little of what you put into the market today, but when you continue to invest when the market is down, you can buy more stock than you could a year ago with the same amount of money. When the market goes back up — which it will — those who continued to invest with their discount broker during this time, when stocks are “on sale”, will be that much closer to reaching their financial goals.

Don't forget, also, that investing should be for the LONG TERM…not for just a couple of years. Remember that 80% of ANY rolling five-year period in the last 110 years has averaged up, and over 90% of any rolling 10-year period and each rolling 20-year period have shown overall gains. Thus, market hiccups don’t look nearly as bad.

When you make the conscious choice not to participate in the recession, suddenly the dire economic news does not seem so apocalyptic. If you do just a few things to protect your family — most important is paying off debt (and not accruing more) and putting aside an emergency fund equivalent to at least six months of expenses — then the numbers given in the evening news, even if you are included in the latest round of layoffs, won’t keep you awake at night.

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Andy Higgins #1

I watch the Mad Max movies and see what I will need after the market melts down. I figure gas, a fast car, canned food, and guns would be the short list. An emergency fund would be great at first, but when the banks fail, it won't be worth much. Bartering for stuff would pretty much be the new economy, that and marauding the countryside. Wish me luck.

You've titled this article 'How to Deal with Recession Anxiety', but you've offered no 'real' solutions.

I think the problem is that you started with a false premise, that people have recession anxiety because of uncertainty and the unknown. You've also pointed out that 90% have a job if they want one, and that Recession is a mindset.

Statistically over 20% of Americans are either unemployed, taken significant pay cuts, taken lower paying jobs, recent grads or business owners with reduced earnings. Google: true unemployment rate. That's 1 in 5 people. When you consider how many dual income households there are in the U.S., then you realize it's almost every other house on your block that is making significantly less money.

The point is most people feel anxiety and stress because they are in a situation that is beyond their control, not just uncertainty. It is definitely more than just a mindset.

I'm not sure how suggesting that people have an emergency fund is going to help. It's a little like telling someone lost in the desert to bring along a water bottle. I suppose it's good advice for the next time.

Paying off debt and investing are also good actions, but again irrelevant to the situation.

If you are truly feeling anxiety about the recession you should recognize that there will always be good times and hard times. Focus on the things that you can control today – think day to day. Do not isolate yourself from your community. Recognize that many people are feeling the same effects, and you can help each other out. Further if you are really down consider seeing a doctor or a therapist.

Now if you are one of these people who haven't really been effected by the recession, you should get yourself down to a shelter and volunteer. Nothing clarifies the mind like a little hard work.

These are great tips. I'm someone who doesn't watch the news other than to find out what's been re-called, hurricanes, and other things that may effect me.

Well, I was not at all worried about the economy when I was finally old enough to look for a job. I had one and everything was peachy- in Texas. I come back to St. Pete, FL and now there's only some skinny pickings for jobs.

Optimistic, I rode my bike all over town to find a job. I was 17. I almost got hired but wasn't 18 so that ruined it.

I finally turned 18, had a place in my name, and not even a minimum wage job existed in my city anymore. All the jobs were gone. The only thing left was bs sales type jobs where you only got commission. Yeah, no thanks.

The first time a "Help Wanted" sign had been posted in over a year, not even a day later it was taken down. This was for a part-time cashier at Dollar Tree! I talked to the man at the desk and he said in that in just 2 hours, they ran out of paper apps. Over 300 people applied in a day! To dollar tree, to make at most $125 a week.

It isn't purely the media. I'm living in it. I'm surviving it. In one of the worst areas in the country, mind you. Our economy has always been weak here, now it's practically non-existent.

I want to move but I can't. Because the cost of living has gone up almost thirty percent in just one year. Even the neighborhood hookers don't make anything worth talking about. It is really that bad.

What this country needs is a serious revival and a new economic model. Otherwise we will continue to have these recessions and depressions each decade, with each one worse than the last until finally we collapse.

i'm with brian. i would definitely have less recession anxiety if i had done or could currently do any of the things you mentioned. and while the well-prepared (those who have done what you've suggested) may have some recession anxiety, the deeply anxious folks are in situations like mine: i'm self-employed but have made barely any money over the last year+ (and the self-employed aren't eligible for unemployment), have exhausted all my emergency fund to make ends meet, and have a load of debt.

yes, when we all come out of this i will definitely approach my finances just as you suggest, but for now, i'm just trying to subsist and unfortunately, these tips don't offer much help for my anxiety.

When you fall further and further behind on your payments, creditors would much rather settle your debts than have you file for bankruptcy. The current economy has only accelerated that fact." Doug Van Arsdale, CEO of Credit Solutions, the settlement industry innovator, said, “Of $29.5 million in unsecured client debt, our Settlement Advisors obtained $15 million in settlement offers from creditors in this past June alone, which is testimony of their strong negotiating skills as well as our company’s leverage with creditors.